CP-111: Vermont Propane Regulations
CP-111 is shorthand for Rule 111 of the Vermont Consumer Protection law (9 V.S.A. § 2461b) that regulates the sale of propane. The regulation covers any person or business that “purchases propane, for consumption and not for resale, through a meter or has propane delivered to one or more storage tanks of 2000 gallons or less.”
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CP-111 Summary
Tank Removals and Refunds
• A propane dealer is required to remove their aboveground storage tank within 20 days after a request from a customer, disconnection, or termination— as weather and access to the tank allow.
• A dealer is required to remove an underground storage tank within 30 days after a request from a customer, disconnection, or termination— as weather and access to the tank allow.
• Dealers that fail to remove a tank beyond the time allowed face a fine of $250 for the first day and $75 for each additional day, with a maximum penalty of $2000.
• Once notified of a service termination by a consumer in writing, a propane dealer is required to refund or credit the consumer for any propane that remains in the tank within 20 days, regardless of whether the tank is picked up.
• If the refund check is not mailed within 20 days, the propane dealer is required to make an additional penalty payment of $250 to the consumer. This increases $75 per day until the refund and penalty payment has been mailed or delivered. This penalty is capped at 10 times the amount of the refund. If the customer pre-paid for 100 gallons of propane at $3 a gallon, the maximum penalty for failure to refund would be $3250. In other words, $250 penalty for failure to refund within 20 days plus $3000 (10 x $300).
• The “penalty clock” starts once the dealer has received written notice from the consumer that they have switched companies or the company has disconnected service. The penalty clock for failure to refund also begins when a dealer has taken action to disconnect service, regardless of whether written notice is received.
• If the dealer is prevented from picking up the tank because of weather or access, a refund is still due within 20 days. If the exact quantity cannot be determined with certainty, 80% of the dealer’s best estimate is required. The remainder is due within 14 days after the removal of the tank.
• The law offers limited protection to propane dealers by requiring the consumer to forfeit any refund if they block access to the tank in an attempt to generate a fine. If a consumer is blocking access, it is important to document each and every incident.
• While tank swaps are not required by CP-111, propane dealers must “cooperate reasonably with the consumer’s new seller to exchange tanks, when appropriate, taking into account such factors as tank ownership, access, value, propane remaining in the tank, condition, safety and liability.”
• A tank can only be filled by the tank owner or with permission from the tank owner.
Property Transfers
• While CP-111 requires the propane dealer to refund or credit the consumer for any propane that remains in the tank when service is terminated, this is complicated when a property is sold or a tenant moves out. It often makes more sense to prorate the propane during the property transfer to ensure service is not interrupted.
• In order to accommodate this request, the Vermont Attorney General’s Office has approved the use of a transfer form, like the one available vermontfuel.com/propaneform.
• The transfer form is a tool that allows buyers and sellers of a property to more easily communicate with the current propane dealer during a property transfer. It allows the home seller to indicate whether or not they wish to be credited for the gas remaining in the tank or whether they wish to transfer any refund to the new owner. The form also improves communication between the current propane dealer and the new resident to determine whether to establish service.
• The goal of the form is to provide clarity for buyers, seller, realtors, and propane dealers at the time of a property transfer and ensure compliance with the regulation.
• While the VFDA Transfer Form has been approved for use by the Vermont Attorney General’s Office, it is not required to be used during a property sale or transfer.
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Fees
• Dealers are required to issue an Initial Fee Disclosure Form (FDF) to a new customer with all charges that apply to propane service, including any installation charges. A subsequent FDF called an “Existing Customer Fee Disclosure Form” must be issued if the dealer increases or adds any fees. FDF templates for both initial and existing customers can be found at vermontfuel.com/propaneform.
• A new or increased fee can only go into effect 60 days after the FDF is delivered to the customer.
• The only fee that can not be increased after 60 days is termination fees if the customer has been with the propane supplier for less than 12 months.
• A propane dealer that changes or adds a new fee must distribute a new FDF to the consumer and include all current fees and their amounts. The new or increased fee must be clearly and conspicuously distinguished, through increased font size, bolding, or highlighting.
• Vermont law allows fuel dealers to itemize the 2-cent per gallon Fuel Tax. Propane dealers do not have to include this tax on a FDF or provide 60 days notice since this is a state tax and not a company fee.
• A dealer is not allowed to increase or add fees to any consumer who has entered into a guaranteed price contract that has a penalty for early termination during the term of the contract.
• Propane dealers can only charge termination fees if the tank has been on the premises for less than twelve months, but only if they are disclosed in the initial FDF.
• No termination fees are allowed after 12 months. This includes consumers that established service less than 12 months ago, but are using a tank that was installed more than 12 months ago by the previous property owner or tenant.
• Propane sellers can charge tank rental fees. Propane sellers are allowed to waive tank rental fees for large volume consumers. However, “minimum consumption” fees are banned.
• A dealer may not charge more than 1/6 of the consumer’s estimated annual usage for a security deposit, and may only charge a security deposit if the consumer is a credit customer. If the consumer does not owe a back balance, the security deposit must be returned to the customer within 14 days of disconnection, with any accrued interest. While a specific interest rate is not specified in the statute or rule, the prevailing retail savings account rate is the benchmark for security deposit interest. The rate can be disclosed (either as a set rate or variable) and set at the time the deposit is initially taken. A propane dealer may require a COD customer to pay an early termination fee, if disclosed on an FDF. The early termination fee is limited to the cost of labor and materials of removing the tank.
Propane dealers are allowed to impose minimum delivery requirements, as long as they are no less than those outlined below.
100 gallon minimum delivery for tanks less than 250 gallons.
125 gallon minimum delivery for 250 gallon tanks.
175 gallon minimum delivery for 325 gallon tanks
225 gallon minimum delivery for 500 gallon tanks.
300 gallon minimum delivery for 1000 gallon tanks.
Propane paid for by the fuel assistance program are exempt from minimum delivery requirements. According to CP-111.07 “When a seller contracts with a governmental or private agency to make a delivery to a consumer, it shall deliver the full amount of the propane paid for by the agency and shall not require any minimum delivery or security deposit.”
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Cash, Credit, and Disconnections
• Prior to changing the status of a credit customer to COD, the dealer must notify the consumer in writing of the intent to do so. The consumer has 15 days to respond to the notice, and the dealer must respond to the consumer prior to making the change effective.
• A dealer can not deny service to an existing customer for non-payment of a back balance —if the consumer provides cash up front. However, the propane dealer is allowed to apply up to 25% of the cash toward the back balance. For example: If an existing customer has a back balance of $200 and pays the dealer $400 for a delivery, the dealer can only put $100 toward the back balance and deliver $300 worth of propane. However, if the cash leftover isn’t enough to meet the dealer’s minimum delivery requirements, no delivery is required.
• If the customer has not made a payment in more than eight months, the dealer can collect 100% of the back balance before agreeing to deliver propane.
• A disconnection is a deliberate termination of gas service, including a deliberate failure to deliver fuel. Under Vermont regulations, dealers must generally provide notice prior to disconnecting propane service, as well as notice when gas has been actually disconnected. The dealer must send a first notice of disconnection at least 14 days (and not more than 30 days) before the disconnection will occur. During the heating season, the dealer must also try to reach the consumer by phone or make an in-person visit to the location to inform the consumer of the impending disconnection. Disconnections can only occur during a time when the dealer has staff available for the consumer to contact to stop the disconnection. Disconnections for safety issues do not require advance notice.
• If service has been disconnected, a consumer needs to contact the dealer to make arrangements to resolve the issue that led to the disconnection. If the disconnection was due to a delinquency, the dealer must accept a reasonable repayment plan. Service must be restored within 24 hours once a payment is made.
• If the consumer is a tenant and the propane account is in their landlord's name, the consumer must still be notified if the gas is about to be disconnected just as any consumer would be. In the event of a disconnection, the dealer must provide the tenant with an opportunity to restore gas service under their own name, and can not bill the tenant for any balance due on the landlord's account.
• A dealer must provide service to a consumer in their service area who is prepared to pay cash up front for a delivery, subject to the dealer's standard contractual terms. Even if the consumer is not credit-worthy, the dealer is required to deliver the fuel if the customer provides cash for both fuel and installation fees. A dealer is permitted to charge a fee related to the costs of having to remove a tank in less than one year (either as an up-front “security deposit” type fee, or later as an “early termination fee”). The fee must be limited to the cost of labor and materials.